Examining Direct & Interactive Marketing Applications in a Variety of Sectors Chapter 14 Copyright©...
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Transcript of Examining Direct & Interactive Marketing Applications in a Variety of Sectors Chapter 14 Copyright©...
Examining Direct & Interactive Marketing Applications in a Variety of Sectors
Chapter 14
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Opening Vignette
DuPont Personal Protectio
n
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
The Nature Of Industrial Markets
Business-to-Business direct marketing involves the process of providing goods and services to industrial market intermediaries, as opposed to ultimate (final) consumers
Industrial goods are differentiated from
final consumer goods based on their ultimate use
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Types of Industrial Goods Raw Materials – These are products destined to become part
of another product.
Fabricated Materials – In contrast to raw materials, these have already been processed but may require further processing.
Installations – Major equipment with long lives such as buildings and major equipment.
Accessory Equipment – Such equipment is used to aid and implement production and includes office machines as well as machine tools.
Operating Supplies – Materials used in producing goods & services.(Are similar to convenience goods in that they are consumable)
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
The Characteristics of Industrial Demand
Derived Demand Inelastic Demand Widely Fluctuating Demand Knowledgeable Demand These characteristics/types of
demand distinguish industrial demand from consumer demand
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Is B2B Direct Marketing on the rise?
YES!! Q: Why? A: The rising cost of a personal sales call.
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
B2B Applications Develop “leads” for salesperson follow-
up Achieve direct sales Reinforce sales efforts Introduce new products Develop new markets and applications Builds goodwill Conduct market research
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Notable Users of the Tools of Direct Marketing are
Providers of:
Office products Industrial plant supplies Computers (& their peripherals) Building equipment Aircraft parts AND…don’t forget … SERVICES!!
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Federal Express (FedEx) A direct mail program designed to
expand its market, increase its penetration & hold onto its current customers.
DM was aimed at 3 different segments:1. Frequent users of Priority 1 2. Infrequent users of Priority 13. Other FedEx customers who had never used
Priority 1 See text for results!
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Challenges for B2B Direct Marketing
Marketing costs are increasing while the audience reached is decreasing
Face-to-face selling, down in efficiency, is up in cost
Customer relationship managers often do not integrate an analytical approach to combining operations with marketing programs and campaigns
Standard Industry Classification is not as predictive in the current business environment
Communication clutter is at an all time highCopyright© 2010 Pearson Education,
Inc. Publishing as Prentice Hall
How to Identify B2B Market Segments
Industrial markets are much smaller in numbers but not in sales volume
Standard Industrial Classification A common means of industrial market
segmentation has been through the SIC coding system developed by the federal government
Bases for statistical data used by the government, trade associations,
and business enterprisesCopyright© 2010 Pearson Education,
Inc. Publishing as Prentice Hall
NAICS Improved on the SIC Code system
by increasing focus on information technology, service industries & international comparability
6-digit code: identifies over 350 new industries and 9 new service sectors
Used in US, Canada, Mexico Review chapter 14 for more details
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Input-Output Analysis of Industrial Markets
Input-output matrices derived basically from Census Bureau data, trace the distribution of goods from their origin to their destination
Determines the impact that specific industries have on the total economy, not just in what they sell but also in what they buy (supplies)
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
The Census Bureau’s TIGER System
The Global Positioning System (GPS) and the Census Bureau’s TIGER system, both associate latitude and longitude coordinates with street addresses.
Used to pinpoint locations, establish business sites, locate competition, measure distance, and generate data about the demographics of a business location
Great for mapping capabilities with the information in a company’s database
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Other Industrial Market Segmentation Criteria
Industrial organization can be categorized by financial strength, size, number of employees, sales volume and/or geographic location
Other criteria differentiate whether the enterprise is a head quarters or branch office.
Most important basis for B2B market segmentation is an industrial organizations own customer list!
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Why Direct Marketing Works for Non-Profit
Organizations Direct/interactive market is:
Measurable Accountable Targeted Cost-Effective Requires a Direct Response
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Nonprofit Direct Marketing Users
Health concerned organizations Environmental organizations Educational institutions Religious institutions Political organizations The government
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Uses of Nonprofit Direct Marketing
Gaining awareness & supporters Driving memberships Securing volunteers Raising funds
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Customer Relationship Building
For nonprofit organizations, customer relationship management (CRM) simply means developing a relationship with donors, thus ensuring their future support.
Most nonprofit organizations do NOT use the word “customers”
Preferred terms are donors, volunteers, clients, board members, etc.
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Customer Relationship Maintenance
Nonprofit organizations can effectively maintain and strengthen relationships with their customers by adding a feedback element to each form of communication
The most important thing non-profits can do is to listen to their customers
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Corporate Partnerships Cause-related marketing is
defined as a commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product, or service for mutual benefit
See Figure 14-6 for a good example
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Basic Fundraising Principles (Bob Stone)
1. Form a committee of influentials with the charge to make contacts with potential contributors, establishing a targeted contribution amount for each potential donor
2. Mount a direct response campaign to a list of identified prospective contributors
3. Organize a follow up campaign to support the direct response campaign
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
8 Step Fundraising Plan
1. Listen to your donors2. Keep your mission in mind3. Tell your story vividly4. Go high-tech, but keep people focused5. Let your donors fund projects6. Target your audience7. Involve the CEO and board8. Launch a fundraising campaign
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Non-Profits Seek Volunteers as well as
Funds Do you work for a non-profit
organization? More than 60 million people
in America do! Are you a volunteer? 26.2% of all adults volunteer
(36.5 hours per year average)
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
A Fundraising Appeal … must do three things…
Strike fast Personally grab and shake Make action easy
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Media strategies and Award Winning Campaigns Direct Mail
The stellar medium for nonprofits Used to maintain contact, build and
sustain donor/member relations Telephone
Example- Ohio Special Olympics = added Telephone to Direct Mail
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Media strategies and Award winning Campaigns
Television Example: Jerry Lewis Telethon for Muscular
Dystrophy Often used in the form of infomercials
The Internet The Internet has not been overly successful
as a fundraising medium for most nonprofit organizations; however, since 9-11 “donate here” buttons are no longer idle
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Political Campaign Direct Marketing Objectives
Raising money Gaining support for their cause Securing new members Obtaining votes
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Political Micro-Targeting Also referred to narrowcasting, this
technique aggregates groups of voters, based on data about them from databases and on the Internet
Political parties gather personal information about voters to target them with messages intended to influence their votes
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Political Campaigns The ultimate question is “ just how
successful are political direct marketing efforts?” Unlike most nonprofit organizations,
political parties don’t measure their success by response rates or dollars.
They measure it by votes
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Governmental Organizations
Many government organizations rely on direct marketing to promote their own products and services, for example US Post Office (USPS) Internal Revenue Service (IRS) US Military Convention and Visitors Bureaus
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Sports Organizations Objectives of sports organizations
using direct marketing: Selling tickets/filling seats – both for
single events and for the season Getting corporate sponsors Prospecting for new fans
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall
Direct Marketing Activities of Sports Organizations
For good Customer Relationship Management (CRM) and Partner Relationship Management (PRM), use
Newsletters E-newsletters Direct mail Outbound telephoning
To reach Business Sponsors, use Direct Mail Radio and Television direct response ads Ads in local newspapers, magazines local programs and
other publications
Copyright© 2010 Pearson Education, Inc. Publishing as Prentice Hall